The State Of International Franchising

Why Global Markets Are Embracing Franchising

Experts see various reasons for the increasing interest and expansion of U.S. franchises into the global market, including more readily available financing for franchisees and unprecedented technological advances.

"The power of the Internet has a great deal to do with the acceleration of franchising overseas," says Holt. "The Internet allows people to share a wide variety of industry-specific information, such as marketing ideas, logos and operations manuals. Easy access to such information has opened up franchising to just about anyone. It's no longer necessary to have a factory; all you need is a phone and a computer."

International markets have also embraced franchising because many countries are experiencing workplace trends common in the United States. "The U.S. trends of downsizing and re-engineering are clearly extending into international markets," says Holt. "As a result, people laid off from middle and upper management positions find themselves with severance packages and a desire to run their own business."

Ainsley does see a downside to franchising's popularity overseas: "All this success makes for a more competitive business climate. Franchisors indigenous to other countries, such as Germany and England, are coming into the market. And in response to all the activity, a number of countries have increased franchise regulations."

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